Low income families hit the hardest from COVID-19 pandemic
It will come as NO surprise to anyone that this pandemic has hit the low income earners the hardest. Only 23% say they have emergency funds that would last them three months coupled with unemployment at a staggering 33 million, this is a perfect storm for the US economy.
In this article, Pew Research Center conducted this study to understand Americans’ assessments of their personal financial situation during the current period of economic slowdown and high unemployment rates caused by the coronavirus outbreak. They surveyed 4,917 U.S. adults conducted April 7-12, 2020, using the Center’s American Trends Panel.
Looking at the data they report that "Overall, 43% of U.S. adults now say that they or someone in their household has lost a job or taken a cut in pay due to the outbreak, up from 33% in the latter half of March. Among lower-income adults, an even higher share (52%) say they or someone in their household has experienced this type of job upheaval.”
They go on to say "lower-income adults are less prepared to withstand a financial shock than those with higher incomes. Only about one-in-four (23%) say they have rainy day funds set aside that would cover their expenses for three months in case of an emergency such as job loss, sickness or an economic downturn, compared with 48% of middle-income and 75% of upper-income adults. And while 53% of lower-income adults say they will have trouble paying some of their bills this month, about a quarter of middle-income adults and 11% of those in the upper income tier say the same."
The report goes on to breakdown the demographics deeper, into race, age, education level, etc. that again comes as no surprise as the lower income community seems to take the weight of most major crisis. When they asked about the stimulus checks they found that the majority said they will use it to pay bills.
"Given these financial constraints, more than half of adults who expect to receive a direct payment from the federal government as part of its coronavirus aid package say they will use a majority of the money to pay bills or for something essential for themselves or their family. About one-in-five (21%) say they will save a majority of the money, and 14% say they will use it to pay off debt. The remaining 10% say they’ll use it for something else. Again, there are differences by key demographic groups, with black and Hispanic adults, those without a college degree and those in the lower-income tier more likely to say they will use the money to pay bills or cover essential needs.”
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